Existing population of Pakistan is approximately 18 million

[1] of which 68% have access to electricity. Average installed capacity per capita is just about 0.13 KW; however the electric power consumption per capita is merely 405 kilowatt hours per annum, resulting into 36.32% utilization of installed capacity. The utilization excluding transmission and distribution losses was not more than 47%. Public Sector Thermal Projects have total installed capacity of 4,720 MW, however due to de-rating capacity, lack of fuel and other inefficiencies it could produce only 33% of its available capacity. This low utilization capacity is not by choice but due to inefficiencies and malpractices of key institutes involved in the generation, transmission and distribution of power in the country.

This low ultimate utilization of installed capacity has put the country, into one of the worst energy crises in its history. Average demand of electricity was 15,026 MW in comparison to average supply of 11,139MW during the year ending 2012-13. This resulted into an average shortfall of 3,886 MW. High transmission and distribution losses are adding the fuel to the fire. The domestic consumers[2] have witnessed average 1,975 (22.5%) hours of outages during last year. Commercial users suffered 20%[3], while small scale industry was pushed to only 70%[4] of electricity. Agricultural Sector witnessed average outages of 2,324 hours during 2012. The prolonged outages due to calamity of power sector has resulted into an economic turmoil as well as public unrest.

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Promptly after assuming control in June 2013, the new government came up with two important policy decisions. First to pay half a trillion rupees to energy companies and secondly to announce a new power policy. The government made payment of PKR. 480 billion to independent power plants (IPPs) to clear circular debt. It also issued bonds to pay off liabilities relating to state-owned corporations. Government also announced a new power policy to embark the reforms in power sector. The target was to add 1,700 MW of unutilized capacity in the national grid after clearing the payables of IPPs. The situation has considerably improved after these measures. However the jolting gap between demand and supply is expected to remain there because of expensive energy mix and inefficiencies in transmission and distribution network of the country.

[1] Estimates by World Bank as at the end of June 30, 2012

[2] Urban 1,453 & Rural 2,324 hours weighted average

[3] 1,697 hours of outages

[4] 2,623 hours of outages